Richard also shares the Raw Material business model and what that will mean for their global growth story. (Raw Material story from 14min 10s).
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The Ryan Marketing Show
Richard Corney – Flight Coffee & Raw Material – EPISODE 14
Voice over: Ten, nine, eight, seven, six, five, four, three, two, one, fire.
Ryan Jennings: If I can’t get the intro right… it’s my show – if I can’t get this first bit right, I can’t do the rest of it.
Richard Corney: Come on, mate.
RJ: You’re listening to The Ryan Marketing Show. This is episode fourteen of one hundred, and today I’ve got with me Richard Corney from Flight Coffee in Wellington. How’re you doing, Richard?
RC: I’m really great, thanks Ryan.
RJ: Good, man. So, the reason we’re catching up is because you’ve kind of taken New Zealand and the world by storm in coffee since the whole specialty thing took off a few years ago. Where you’re at now, where have you come from, tell me a little bit more about the story since–
RJ: Start from the beginning. I know it’s a big one.
RC: Okay, cool. I think from when we started, we were also very lucky with how we were with our timing when we entered the market. We arrived at a time where it was post third wave, as it was known in the States, and now probably more commonly worldwide, third wave coffee, which was an interaction of producer, roaster, and a lot more connection between that. And so, when we entered, it certainly wasn’t our plan initially; we didn’t really know anything, to be completely honest, about coffee, compared to what we know now when we started, so we got lucky with timing. But we were young, we were enthusiastic, we were passionate, and we were into it, so we quickly saw where things were headed and we very much wanted to get into that. So, with the original roasting plant up in Hawke’s Bay, I was based up there and we had Matt and Nick down here in Wellington, and we in 2010, able 2010, started up Memphis Bell Coffee House, and that was Flight Coffee’s entry into the New Zealand Market – sorry, the Wellington market, which I suppose you could argue would be the New Zealand market when you consider the size of Wellington compared to Napier.
RJ: So early, early on from the outside looking at what Flight Coffee was doing, you guys were just kind of opening up a couple of cafés, right? It wouldn’t be too easy to distill what the big plan was at that stage. Or was it? Were you quite open at that stage?
RC: No. Well, from 2010 to 2012, things moved really, really quickly. We had Matt leave in 2012, I think it was, to– he moved to Boston in the United States, and when he went, sort of what went with that was the exposure from one of us to the rest of the world, as it were. He based himself in Boston, and when he had the opportunity to travel south, did, and that’s how we ended up essentially with our relationship in Colombia. And fast forward five years and we have a coffee farm in Colombia that we purchased with our partners there last year, all of which began as a result, sort of, Matt traveling when he was in Boston.
RJ: Right, so Matt traveled not for coffee initially, but used the trip to go and visit what it was all about.
RC: Totally capitalized on the opportunities that would come out of being away from New Zealand at the time. Meanwhile, Nick and I were here, I was in Napier, as you know, roasting up there in the little shop that we had up there, and Nick was, in 2011, he was running Memphis Belle, transitioning sort of out of Memphis into Flight full time, and I think in early 2012 we employed Trev, who’s now a partner, as our first employee, and things sort of really picked up from there.
RJ: So, there’s four partners in all, is that right? There’s Trevor, Nick, Matt…
RC: There’s five of us now. So, there’s myself, Matt, and Nick, Trevor, and Ronick. You met Ronick earlier this afternoon.
RJ: So, how do you go through that transition of people managing all these different moving parts and making sure like any good rock band you stay together?
RC: It’s really funny, people have said to us– actually, people in the industry have said this to us: “Oh, you’re not going to– you’re going to implode. There’s too many of you. You can’t have friends in business, and you’re top heavy.” Great question, because to that, if that’s what people think, if that’s the reality that people exist within, then I think, well, cool, you can have that mindset and you can struggle all your life. Now, that’s not to say we haven’t had our challenges, but we’re very open, very real about ourselves with each other. We hold each other to account, we have a great network of communication, and, you know, I’m in business with my best friends. And it’s one of the best things about being in business with your best friends is when you’ve got issues, when you’ve got problems, challenges, you can share them; you share the load. So, how do the moving parts work? Well, we’re now six years after the fact of setting up, we’ve grown, we’ve vertically integrated our businesses, and we now have enough, I suppose, umbrella underneath our parent company that enables each of us to be experts, and if not experts, becoming experts in the areas of the part of the industry that we operate in.
RJ: We’ve just moved inside; there’s a few lawns that needed doing and Richard didn’t want to do them and neither did I, so we’re now inside a lovely bar called The Rogue and Vagabond, and we’re going to get back into this show. So, following up on that about the rock band question, Richard, how do you then instill that culture to be outside just you and your business partners to the rest of the company and to the wider group of consumers that you’re serving through Memphis Belle or through Flight Coffee, The Hangar?
RC: I suppose you do it through brand and I didn’t understand much about brand or even how to communicate that into the marketplace when we started. Fortunately, that’s definitely a strength that Nick and Matt had and still have. But you want to create something that people want to cathect, so that they want to take that brand home, they want– that bag of coffee, for example, is the bag of coffee they want to have on their shelf in their pantry as opposed to any other bag of coffee. And how you do that is– well, in the marketplace that is becoming as saturated as ours, I suppose you could say is you do it through points of difference: you do it through engaging your community and engaging your audience through all the various means of social media and through all the other spectrums, but you do it with sincerity, you do it with integrity, and you get it out there and you get people telling your story or selling your story. I think back from when we first started in 2011, and if you were to ask who one of our early brand champions was, it was yourself, and so, there it is. You get people championing your brand and helping sell your story on behalf of you.
RJ: Do you think there’s a visual look to how you’ve communicated that? Were you quite particular on that to start with or was it more just evolved as you guys started running the business?
RC: Yeah. So, from a visual perspective, absolutely. Early on in the piece, we engaged with a branding company, but it was very minor, the work that they did for us, and it evolved. Matt did a lot of it early on in the piece. 2013, I think, we invested in a complete overhaul in our brand. It was completely redesigned from everything from designing a color palette to how it looks, how it feels. It’s been a massive project, but we’re about to launch our new website as well. And when we did that, that was a watershed moment for us in terms of how we communicate our presence in the market, because, little did I understand, but more so did Nick and Matt, I guess, is that how it’s perceived and how people view it, like visually, is so, so important – so huge. You can have the best coffee in the world, subjectively or objectively, but if it’s not communicated or if it doesn’t have a presence that represents that quality, you’re probably not going to sell it to too many people, and you can’t have a business like ours, which is one focused on growth, without that – without sales.
RJ: Did you know that there was a problem with the old branding, or was it more there were things you wanted to communicated going forward and it was just an evolution? Was it more of a stopgap, like let’s now switch it up?
RC: I think it was both, actually. Yeah, I think it was both. We got to a point where– and I think when we look at how we built and branded Memphis when we built it was very what would you call sort of retro; it was deliberately sort of a bit broken. The branding worked when we were up in Memphis there with the original brand. As we grew to sort of become a little bit more serious and taking a little bit more corporate – not in the sense of creating a full corporate brand, but to be taken seriously by people who are, say, corporate-minded, and try to appeal to that more mass-market of consumer that is into specialty coffee – there was definitely a gap between Memphis, when we had Memphis, and then when we opened The Hangar. And the two were kind of competing for attention, but with the same brand, and that’s when we were like, well, The Hanger doesn’t represent the now Flight. Memphis definitely represents [the old? 0:10:53.3], and it hasn’t changed in six years.
RJ: So, that’s still Mecca for–
RC: Absolutely, yeah. For a lot of people, yeah it is. They’ve been loyal to Memphis. With Johnny, the new owner now – well, he’s not new, he’s been there for over a year – but yeah, and Memphis is very much its own personality, but it’s very much a part of our history. The old branding was very Memphis-esque, as it were, and then the new branding was very essential to identify, I suppose, The Hangar as the new flagship for Flight Coffee, but also we wanted global representation and recognition for our brand and our coffee.
RJ: Given that, wouldn’t it have been an easier move to use that Flight brand for what has been branded Raw Materials? Why is that a brand separate from Flight Coffee?
RC: Good question. The reason is, at least in New Zealand anyway, when we first started this, Raw Material, which was originally named New Zealand Specialty Coffee Imports, Ltd., so a bit of a mouthful; we shortened it to NZSCI, which also works – it rolls off the tongue fine. But coffee companies, we don’t perceive, want to buy off the competition, so to create its own identity, to have complete anonymity between brands and identities, it was essential that we first of all cut this whole New Zealand-centric idea. We’re dealing in coffee – it’s a global product, so we changed the name and created its own identity separate from the roasted market, which is Flight Coffee, and the green coffee market, but with the point of difference of making sure that the way we bought and sold coffee was entirely different to how its mostly traded currently.
RJ: Right, so it really gave you two additional things that the Flight Coffee brand, no matter how good it was, couldn’t give you, which was neutral in your current market with competitors who want to buy wholesale, and then internationally: by dropping New Zealand, you’ve now got something that can become a global recognized brand within your niche.
RC: Absolutely. So, Flight Coffee’s very B2B and it’s B2C, but raw material will never be B2C in the sense that it’s not going to sell to a retail market. Raw material is very much focused on trading coffee through, or buying coffee through, fixed prices at a certain level of quality to ensure that coffee producers are paid well above the market rate, and we do that through fixed prices. And because that method of trade is not well known, even in the green vine world – it’s becoming more and more – we’re certainly no the first to claim to do it; it’s not our brainchild by any means, but we certainly see that as a way of sustainable coffee production for the future – but raw material is the carrier of that. It needed to be something completely separate to what we’ve got here with Flight Coffee.
RJ: So, you’ve basically taken what you’ve learned from the Helena model and the farm work you’ve done there to supply Flight Coffee, and applying that now with Raw Materials with different coffee producers, so that’s kind of going to reduce your risk, because you’ve done that experience part already. On the buyer side, that’s going to be very different from Flight Coffee with that Raw Material brand. How do you get traction in the countries you want to be in? How do you get Raw Material as the logo, the brand, into the mind of a consumer? Because you’re kind of starting again now.
RC: Yeah, it’s been a really interesting exercise. So, Matt has spearheaded this pretty much from day one. So, from Boston down to Colombia when he traveled in 2011, he formed the initial relationships with the Helena guys and then we sort of– fast forwarded version of events, constantly still learning, but we partnered with some people in the UK, expat Kiwis, and we’ve got UK distributers now, and we’re providing a lot of support to them as we perceive the UK and Europe to be the biggest growth market for green coffee globally. You could argue that Asia and parts of the Middle East could be, but I think they’re maybe a step or two behind at the moment. But yeah, we partnered with some really super cool people in the UK and they cathected the brand early on in piece. They loved what Raw Materials stood for and what our social values were and are, and so when you get that buy in, it’s easy to sell to people who want to buy from you.
RJ: Right, so you almost reverse engineered it: rather than looking for the right type of people, you’re looking for the Flight Coffee versions of you in other markets.
RC: Yeah. I suppose you could say that, yeah.
RJ: So, if they fit your culture, you know it’s going to fit as a business.
RC: It helps too that our partners in the UK are expat Kiwis. That helps a lot.
RJ: From Wellington? Do they know what’s happened here over the last few years, or is it more just a–?
RC: Yeah, they very much know what’s happened over here, but they’re also very successful operators in London. It helps when you’ve got people who understand you culturally as well as also from a business sense. It’s made that transition into that market a lot easier. But what we do once we’ve done that is we create that brand. So, if you look at the Raw Material Instagram, for example, it’s a very solid resource of information. The posts on that are very deliberate; it’s to provide education to people who don’t really necessarily know much about coffee – green coffee – and so we have a lot of followers. I think there’s over 13,000 now who are engaged with the photos through deliberate photography and with very deliberate texts behind them stating facts and so forth. So, Matt, who’s at the London Coffee Festival right now, has hosted a couple of cuppings and presentations, and– yeah. People know you – it’s really funny; you’d know this – through social media when you say, “Oh, I’m Matt from Raw Material,” and they’ll go, “Oh, face to the profile – I know who you are now. Great. Love your posts,” sort of thing.
RJ: Well, it skips a few levels, doesn’t it? Instead of just the introduction, your digital presence does that introduction– or it precedes you.
RC: Yeah, absolutely.
RJ: So, you’ve been quite deliberate around your Instagram channel strategy. How do you measure your digital success? How do you know there’s a goal that’s being completed? Or at this stage of the brand building, are you just trying to get the brand awareness there for when people go and to their own research?
RC: Yeah, so we use analytics programs to measure that. Matt uses a program – he runs the Instagram account – which helps facilitate all that data, but also helps manage posts and replies, and so forth. So, the information, or should I say the platforms to be very successful and engaging in these programs, you just have to be active – proactive in using them.
RJ: Going into a little bit of detail, are you able to say what’s the program names that you use?
RC: I’m afraid I can’t – not because I don’t want to, but the name slips my mind right now.
RJ: We’ll put it in the comments, guys. I know some of you have been asking me what are the tools and platforms that some of these people are using, so we’ll get this off Matt after the interview.
RC: Yeah, I’ll ask him. It’s totally fine.
RJ: How much does traditional media play a part in getting the word out there about either Flight Coffee or Raw Materials?
RC: Well, if by traditional media, you mean newspaper?
RJ: Newspaper, print, radio…
RC: I mean, it almost doesn’t, because in almost all situations along those platforms, they completely misrepresent our views and what we stand for. So often, every six months, in fact one came around last week, there was another article in the Dominion Post about the price of coffee, and–
RJ: Do you think it’s easier for them to just talk about that because it’s easier to run a stereotype, because that gives you two polarized opinions?
RC: I think it’s a bit of a flash in the pan, because it’s a commodity people like. They like to have an opinion about it, whether they know much about it or not, and it’s really interesting– well, it’s not interesting, it’s quite amusing at times reading some of the comments in the stuff articles and so forth about people’s perception. Absolutely in now way does the commodity price have anything to do with how a café in Wellington, New Zealand or Napier, New Zealand operates as a business; the two have no correlation. You could argue that it does, but only to the point where the commodity market is buying and selling coffee and then the café buys coffee from a coffee roaster, who is another New Zealand business who has its own overheads and so forth. So, that’s been our experience with the media. We had a situation where Nick was on Seven Sharp several years ago and he was interviewed, and it was really funny, because we had a $13 coffee, espresso offering, and it was one of the most expensive coffees we’ve ever bought. It was at a time in our history where we were really trying to explore new varietals and new things, and yeah, it was great taste-wise and all those sort of things. We’ve learned so much since then – I think it was three years ago now. But anyway, the media came in and they had to [sting? 0:21:25.8] and then they sort of overdubbed the story with a bunch of banking noises and change – ching, ching.
RJ: Oh, I think I remember that. It was Heather [Despiciado? 0:21:34.2]–
RC: Yeah, and she’s–
RJ: Which worked for her – she’s got her own show now.
RC: Oh, yeah, must be doing well. And anyway–
RJ: Is it a case of any press is good press? Did that actually help solidify your existing fan base?
RC: Oh yeah, we saw very quickly how liked we were in the community, because to that article, man, once Heather explained herself – I had a phone call with her and she explained sort of where she was coming from – but she got roasted on social media by some of our fans. It wasn’t too many, but it was really interesting to see–
RJ: Pardon the pun.
RC: Pardon the pun. Humbling, really, to see that people really are behind you and what you’re trying to do and so forth. That was certainly the case with that example. We have a policy around media now and it’s like we don’t talk about it. If you want to know our opinions, then I think we’ve got a media release on it, but most people don’t even like– you know, “No, I’m not interested in your media release. I want to hear a buzzword or I want to hear a catchphrase so I can copy and paste and put as a title for a newspaper article,” or whatever.
RJ: Right, so you control your own media strategy using your own channels.
RC: Yep. And it’s so important for us to do that, because we’re not economists – I’m not an economist; I can talk about coffee to a point, Matt definitely can talk economics of coffee far beyond what I can, but at the same time, it’s like you want people to have the right information, and if there is a shadow of a doubt where people don’t have the right information and they can misinterpret it, like they so often do, then so often it becomes misconstrued and misrepresented, which is unfortunate, but that’s people. Coffee processors make a perpetual appearance once or twice a year, I suppose because it’s the second largest traded commodity on the planet. Everyone’s got an opinion about it.
RJ: So, if we were to fast-forward, let’s say, three years from now, what does success look like for where the business is at now versus where it’ll be at then? If we do another one of these interviews, what are we going to be talking about?
RC: Well, let me just find this real quick, because I’ve adapted this sort of saying as a personal little mantra, as you will. Quote, “Those are successful rarely get paid to talk about how not to fail, which is a great shame. Success boils down to serially avoiding catastrophic failure while routinely absorbing manageable damage.” That’s David McRaney, who has the You Are Not So Smart podcast. So, he said that. And since I listened to this particular podcast, I forget which one it was now; I was just like, man, that’s so true. And people perceive– because you’re in business, they perceive you as instantly successful, but that doesn’t at all represent the reality or a necessary truth, and so I think what I love about this so much is– and in answer to your question, I suppose, is really in three years’ time, we would’ve serially avoided catastrophic failure and we would’ve routinely absorbed some manageable damage. And I think that really perfectly sums up – well, at least from a philosophical point of view – how we perceive our success, but also where we’ll be in three years’ time. Hopefully we’ll be– all our companies will be two to three times the size they are now, will be having much more impact in the countries we buy our coffee from, more of those origins coming online, and we have a bigger brand presence with Flight Coffee in New Zealand and hopefully Australia, and who knows elsewhere?
RJ: That sounds like a great vision. So, you’ve really set the tracks right now to get to where you’ve got to, and it’s more of a linear growth, like keep very similar coffees, grow into new markets, but keep the formula for its success right to be able to grow along the lines. What you know works.
RC: What I know works, yeah, and I think what’s happened as a result of our growth is we’ve become individually, as owners and directors, we’ve become very self-aware and we know that we’re very lucky, we’re very aware of our position and our privilege, and so that keeps us humble, and I think that helps with our brand, because that’s what is all our brands: it’s what’s behind it, it’s what drives it – humility and being humble.
RJ: Do you ever worry around– one of the issues with being successful is that you have investors wanting to be part of that success, and knowing when to say no to money or opinions or advice?
RC: Interesting, yeah. I remember there was a time there where we had so many opportunities come our way, like all of a sudden, people were lining out the door. It felt like people could see the potential and they’re like, “Wow, I want to back that horse,” and they’re like, “Get us in there. How do we get in there?” Our landlords, for example, were like, “Do you need equity? Let’s talk. We like what you’re doing,” sort of thing, and then a host of other people. And so, really, I suppose, what it came down to was we were like, “Whoa, what is this?” I mean, we were very grateful and we were a bit humbled by the approaches, but of course, opportunity – people are opportunists – we’re all opportunists – and they saw something that they could perhaps back and wanted to back that horse. I think our part of our story is just saying yes to the right opportunities. We spend a lot more time assessing those opportunities now before we embark on them, whereas perhaps five years ago, things were a lot more sporadic – things were a lot more like, “Oh, yeah let’s do it. Yeah, yeah, yeah. We’re going to do it, yeah.” But that goes with maturity, as well; I’m thirty now – when we started the company, I was twenty-four. Nick was twenty-one. What’s the saying? Men finish maturing at the age of twenty-five? I mean, I think maybe– I don’t know. I don’t think I’ve finished maturing at all. But yeah, opportunities, that’s what we’ve learned, will come and go, and you’ve just got to take which ones that suit you the best, especially if they’re coming to you – if people come to you.
RJ: Are there any looking back you would change – that you would’ve said yes to or would’ve said no to?
RC: No, I don’t think so. It’s an interesting question, because we have no– I actually spoke with Nick about this the other day – I was like, “I don’t think I’ve got any regrets so far,” which is really interesting. We could’ve done things much better, for sure. We could’ve been a lot more efficient, we could’ve known more then, but we were a bunch of young guys just figuring it out, and I think that– no, I don’t think I would change any of the missed– well, not missed opportunities, but any of the opportunities that we turned down.
RJ: That’s amazing to be able to say that. That’s pretty special. If you can do that for the next stage of growth, I mean–
RC: Well, hopefully, yeah.
RJ: Wow. You’ve avoided a lot of potholes.
RC: Yeah, well, we’ve serially avoided catastrophic failure. Does it say that? I forget. I have to–
RJ: Maybe that’s some of the strength of having a group of three, now five, partners: you all have got different skill sets you’re bringing to it, so different strengths to cover other each of your individual weaknesses.
RC: Absolutely. It’s a Venn diagram. And here’s the thing: when Trev came on board, I think it was October 2014, he did a pitch – he’d been pitching for a while – and we got to the point we were like Flight Coffee is not Flight Coffee without Trev, “So yes, you’re coming on board. We want you. You’re not going anywhere.” So, it was really great, and Trev is like any of us – any one of us is invaluable.
RJ: So, he earned the right. He worked out–
RC: Oh, he was our first employee, yeah. He’s the classic example of the guy who started on the factory floor – excuse the corporate analogy – but worked his way up the ladder. He’s a very, very– he’s our general manager for Flight Coffee, he’s the general– he oversees our general management of The Hangar, so his role is integral and key. It wouldn’t be the same company without him. So, we absolutely cover off each other’s weaknesses, our strengths. When combined, our mutual areas of strength are just awesome, and we constantly are checking ourselves to see where we can improve. We had a three-hour meeting this morning about our areas – we have bottlenecks, for example – like what are things that are holding us back?
RJ: Is that a regular weekly thing or monthly?
RC: They should probably happen more often than they do, but they certainly do as a result of us recognizing we can be doing better. Celebrating our successes as and when they come, again, I think success is only a matter of perception really, to be honest, both held by yourself as well as other individuals looking in. We celebrate the small moments and when there’s challenges that we can learn from, we regroup and we flesh them out, and I think it’s super critical. You can always do better. Always do better. Complacency will kill a business, it will kill an idea, and will kill a concept, and if you think you’ve got the formula right, then you’ve probably got it wrong. In my experience, anyway, I think that is very true.
RJ: Well, I think now is a good time to wrap up and celebrate the success of how far you’ve come in those six years.
RJ: And yeah, cheers to the next six years.
RC: Well, thanks Ryan. And thank you for your support too, man. It’s been awesome.
RJ: Hey, it’s great watching, and I feel privileged to get these little insights every so often–
RC: Yeah, cheers.
RJ: — to what’s actually going on.
RC: It’s awesome. Cool.
RJ: Cheers, buddy.
RC: Yeah. Awesome, man.